Question 3

(20 marks)

(Answer all parts of this question)

Pan grows vegetables, which he sells at the local farmers' market. He has recently

expanded his small business to include growing and selling flowers. His first customer is a

local florist called Jan. After a lengthy telephone conversation, Pan and Jan agree that Pan

will provide to Jan 200 bunches of red roses. These are to be delivered to the rear entrance

of Jan's shop on 13 February. On 13 February Pan is having a busy day. He confuses his

orders and delivers 200 bunches of white lilies to Jan's shop. Because he is rushed, he

delivers the flowers to the side entrance instead of the rear entrance. When Jan discovers

the flowers she is horrified. Tomorrow (Valentine's Day) is her biggest day of the year and

she will not be able to fulfil her orders. On 14 February Jan receives 100 complaints from

angry customers who did not receive their red roses. Jan's reputation has suffered as a

result of her failure to meet her orders and she believes this will affect the future of her

business.

(a)

Briefly explain why there appears to be a contract between Pan and Jan.

(4 marks)

(b)

Are the statements made by Pan that he will provide Jan with 200 bunches of red

roses and that he will deliver them to the rear entrance of the shop terms of the

contract? Give reasons for your answer and explain the test that the court would

use to make such a determination.

(5 marks)

(c)

On the basis that the statements referred to in (b) above are terms of the contract,

indicate what type of terms they are. Give reasons for your answer.

(5 marks)

(d)

Explain what remedies are available to Jan if it can be shown that the terms of the

contract have been breached by Pan.

(3 Marks)

(e)

Can Jan claim damages for the loss to her reputation caused by Pan's breach of

contract? Give reasons for your answer.

(3 Marks)